City Lodge is selling its stakes in three hotels in Kenya, as well as its City Lodge Hotel Dar es Salaam in Tanzania, to subsidiaries of the UK-based investment firm Actis.
The Kenyan hotels - the 127-room Fairview Hotel in Nairobi, the 171-room City Lodge Hotel at Two Rivers in Runda and the 84-room Town Lodge Upper Hill in Nairobi - will be sold for almost R141 million, while the Tanzanian hotel will fetch R1 million.
The 148-room City Lodge Hotel Dar es Salaam was opened in 2018, and City Lodge owns the hotel and land on a leasehold basis in Dar es Salaam.
Including impairments, the Kenyan and Tanzanian hotels contributed more than R371 million in losses for the six months to end-December, as the pandemic continued to wreak havoc on the global tourism industry.
City Lodge saw revenue from its 62 hotels fall by 73% in the six months to end-December, compared to same period in the previous year.
The company suffered a loss of R550 million in the six months, from a profit of R46 million in the previous year.
The group said the proceeds from the sale of of its Kenyan and Tanzanian hotels will be used to help settle its debt.
The group had R530 million in interest-bearing borrowings at the end of the year.